As the House and Senate chambers in the state of Texas continue to disagree on the best route for achieving historic property tax relief, James Quintero, policy director for the Government for the People initiative of Texas Public Policy Foundation (TPPF), is calling on lawmakers to provide what Texas taxpayers really want: the historic property tax relief they were promised.
"The Texas House and the Texas Senate continue to jockey to see who can offer the most tax relief to the greatest number of Texans — and that’s welcome news for overburdened taxpayers! As both chambers negotiate the details of any ultimate arrangement, they should keep striving to provide maximum tax relief. The more money returned to taxpayers, the better,” Quintero told the Lone Star Standard.
According to The Texas Tribune, the Texas House and Senate have been in opposition for months over their competing proposals for state property tax relief. Republican leaders in the two chambers are hoping to use the state’s historic budget surplus to pump billions of dollars into property tax relief and are both in agreement on directing $5.3 billion to continue paying for tax cuts approved in previous legislative sessions.
In an effort to lower their tax rates, leaders within the House want to tighten the appraisal cap and send the rest of the $17 billion they’ve proposed for tax cuts, more than $12 billion, to school districts so their tax rates can be lowered, The Texas Tribune reported. Senate leaders, on the other hand, have pursued more targeted relief in their $16.5 billion tax-cut package. Their proposal would send just an additional $5.38 billion to school districts. However, the cornerstone of their package would be raising the state’s homestead exemption — the amount of a home’s value that can’t be taxed by school districts — from $40,000 to $70,000, plus an additional $20,000 bump to seniors and tax credits for businesses.
A recent tweet from House Speaker Dade Phelan lays out the Texas House plan for property tax relief, which he says equates to "over $21B when combined with the state budget." The House's plan would lower the appraisal cap limit for homeowners from 10% to 5%, boost homestead exemption to $100,000 for all Texas homeowners and $110,000 for state seniors, provide 15 cents of school district tax rate compression, and inject billions of dollars into Texas' public education system.
“This session, homeowners and businesses want the biggest tax cut in Texas history. And we’ll settle for nothing less,” Quintero said.
According to the Texas Tribune, tax experts and critics of the House proposal from across the political spectrum warn that tightening the appraisal cap would lead to a number of repercussions that have already played out in California, New York and other parts of the country. They say placing a hard limit on how much appraisals can grow would create vast inequities between taxpayers, accelerate housing costs and disproportionately benefit wealthy homeowners.
Previously, the largest property tax cut in Texas history was $14.2 billion in 2009, according to Quintero. If Abbott's goal is to be achieved, the tax cut benchmark should be at least $20 billion when adjusted for inflation from 2009 dollars.
The proposals from each chamber would save the owner of a $300,000 home around $650 to $700 a year, but SMU economist Mike Davis told Fox 4 News that the homestead exemption also comes with cons, as "it leaves out a lot of business property" such as barber shops, neighborhood restaurants, and boutiques.
